The Year of the Edible

Jun 26, 2019 01:15PM
● By Robyn Lawrence

Fed by the best minds in research and technology, innovation in cannabis-infused food and beverages is entering a new era. Big ag and big food are circling, dipping their toes in, ready to pounce as soon as the US governement legalizes cannabis, a matter of when, not if, that may believe could come as soon as this year or next.

Anheuser-Busch, Molson Coors Brewing Co., Moosehead, Coca-Cola, Diageo(maker of Smirnoff and Baileys), and Mondelēz International(maker of Oreos) have all announced they’re looking into CBD and THC infused (mostly CBD) food and beverages. CVS and Walgreens are planning to sell CBD products in some states. Scotts Miracle Gro is buying up cannabis cultivation companies and making moves into genetically modifying cannabis, while Monsanto consistently voted the world’s most evil corporation was one of the first companies to establish offices in Uruguay after that country legalized adult use.

Scientists who honed their skills at the world’s top food and pharmaceutical corporations and research institutions have put their minds to the plant, figuring out how to break cannabis down to its components and put it back together again to create consistent, measured, predictable effects. They’ve found a way to make fat-soluble cannabinoids into water soluble powders and liquids so that infusing anything is a simple matter of adding and stirring.

And that’s just the beginning. Late last year, the Human Genome Project, which provides source information for gene farming that transforms commercially and therapeutically valuable segments of the human genetic code into agricultural products, mapped the cannabis genome, opening the door to an even more sophisticated level of research on par with other economically lucrative crops.

Citing a study showing that consumers don’t have any problems with corporations considering cannabis-infused products, Nancy Whiteman, CEO of Colorado’s leading edibles maker Wana Brands, told Paul Barron of The Barron Report podcast, “My working assumption is that every major company is looking at this.”

Everyone does appear to be eyeing the edibles market, especially since The Arcview Group published a headline-grabbing report predicting edibles sales would quadruple in the US and Canada, to $4.1 billion, and global sales would reach $32 billion by 2022. They can’t help but notice that consumers are gobbling up newly legal CBD-infused everything including food and drinks pushing predictions that CBD sales in the US will hit $22 billion (up from $262 million in 2016) in 2022, according to the New York Times.

They also like what they see in edible consumer demographics. Primarily female with post secondary education and high incomes, these shoppers buy edibles the same way they do groceries, looking for items that satisfy their food preferences, tolerances, and flavor profiles, according to research firm High Yield Insights. These consumers like edibles because they’re discreet and offer longer, more intense highs and better pain and anxiety relief than smoking, according to an RTI International study of cannabis users in legal states.

Cannabis is taking its rightful place as an established and valuable functional food ingredient, and we haven’t seen anything yet. Sylvan Charlebois, dean of the Faculty of Management and professor of agri-food distribution and policy at Dalhousie University, predicts that within 10 years, 5 to 7 percent of all food sold in Canada will contain cannabis.

A number of events and evolutions have converged so that more and more of us will be snacking on CBD-infused gummies and sipping mocktails microdosed with THC in the 2020s.

Canada Opens Up Edibles Market

Though Canada’s population pales in comparison to the US’s, the country of 30 million people is the first G-7 nation to legalize, and it’s attracting a lot of attention. The Canadian government kicked the complex undertaking of designing a regulatory system for edibles down the road until this month, and earlier this year it held a two-month public consultation period to help craft those regulations, which were expected to impose tight limitations on potency and packaging. Ignoring consumers’ clear preference for gummies (which make up a quarter of the edibles market in the US), Health Canada is promoting healthier edible options such as cannabis-infused kombucha and protein drinks.

Marijuana Policy Group co-founder Miles Light told CBC News that edibles and non-flower products are the ultimate end-game for cannabis companies in Canada because food is a friendlier niche for new, smaller companies than cannabis production, which is already dominated by a handful of mega-producers.

Mainstream food growers and producers are making moves. British Columbia-based Village Farms one of the largest producers, marketers, and distributors of greenhouse grown produce in North America has already converted a large portion of its vegetable greenhouses to cannabis, and New strike Brands is partnering with food company Neal Brothers to produce cannabis edibles.

Edibles Winning in California

Cannabis legalization in the world’s fifth-largest economy and largest legal cannabis market has gotten off to a rocky start as high taxes have forced far too many Californians to hang onto their black-market dealers, but that hasn’t stopped analysts from predicting that $5.1 billion of cannabis edibles would be sold in the state rivaling the beer market this year.

“While the cultivation and concentrates markets are getting most of the buzz, it’s the edibles market that represents one of the strongest sectors for growth in the cannabis space,” Investing News reports. “This market sector is driven in large part by new users and those focused on health and wellness who want a smoke-free cannabis experience. There are signs this consumer segment is already flooding into the California cannabis market.”

Better Eating Through Chemistry?

A couple years ago, Jon Cooper, CEO of Colorado based cannabis research company Ebbu, which industry giant Canopy Growth Corporation acquired last year as part of its efforts to build a collection of patented, standardized products that deliver specific outcomes told me that trust, control, responsibility, and safety would be the cannabis industry’s defining message as it evolved. “People will never trust products that don’t deliver consistent experiences,” he said. “Big companies coming into this space will have no choice but to achieve that.”

His prediction is proving to be prescient, and you can expect to see more and more edibles designed to promote specific effects such as relaxation, focus, energy, stress-relief, and sleep on cannabis store shelves. “We can take the plant components apart and put them back together, literally at will, to drive experiences,” Scott Riefler, vice president of science for cannabinoid company Tarukino, marveled during a “Smart Kitchen Summit” podcast sponsored by The Spoon.

Tarukino, Ebbu, and several other companies have developed processing techniques that emulsify cannabinoids into nano-size particles that dissolve into water and mix more easily into blood. These water-soluble concentrates are game changers, making it a breeze for food and beverage manufacturers to infuse products with dose and effect specific formulations of cannabinoids and terpenes.

Terpenes are a big factor here, and they’ve become all the rage expect to see more and more of them. Dispensaries and retail stores offer everything from terpene concentrates and vaping liquids to terpene infused cooking oils, and brewers such as Heineken owned Lagunitas are giving beer a dank edge by adding common cannabis terpenes pinene and myrcene. Terpenes were among the most studied compounds last year, Analytical Cannabis reports, and that research is now shaping the industry as companies like Steep Hill Laboratories establish databases of terpenes and their usefulness for growers.

Synthetics CBD and THC created in a lab from organic hosts such as yeast, sugar, or petroleum based chemicals will also play a big role. Hyasynth Bio, a Montreal based startup recently acquired by Organigram Holdings, plans to produce thousands of kilograms of CBD powder made from yeast for pharmaceuticals and packaged goods within two years. (Organigram is investing heavily in edibles innovation, including a $15 million fully automated production line that can produce 4 million kilograms of chocolate cannabis edibles per year using advanced engineering and robotics.)

David Kideckel, managing director and senior equity research analyst at investment firm AltaCorp Capital, told The Growth Op that the ability to make cannabinoids in bulk in a lab allows for more consistency in the production of all cannabinoids and will open up a whole world beyond THC and CBD. “As soon as cannabis is descheduled as a controlled substance on a federal level in the United States, you’re going to start seeing research dollars pouring in from Big Pharma and CPG [consumer packaged goods] companies,” he predicts. “They’re going to work on figuring out the potential of every cannabinoid in the plant.”